Question 1

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

Accepted Answer

A)  unit-elastic. 
B)  perfectly elastic. 
C)  relatively inelastic. 
D)  relatively elastic. 
A)  unit-elastic. 
B)  perfectly elastic. 
C)  relatively inelastic. 
D)  relatively elastic.

Question 2

Which of the following correctly comments on the following statement? 'The only way to increase the revenue from selling a product is to increase the product's price.'

Accepted Answer

A)  It is not true. Revenue will increase as the price of the product increases only if demand is elastic. 
B)  This statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic. 
C)  The statement is true. 
D)  This statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall. 
A)  It is not true. Revenue will increase as the price of the product increases only if demand is elastic. 
B)  This statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic. 
C)  The statement is true. 
D)  This statement is not true. Revenue will decrease as the price of the product increases because quantity demanded will fall.

Question 3

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21. This indicates that

Accepted Answer

A)  wine and spirits are luxury goods. 
B)  wine is a luxury good and spirits are inferior goods. 
C)  wine and spirits are highly price elastic. 
D)  wine is a luxury good and spirits are necessities. 
A)  wine and spirits are luxury goods. 
B)  wine is a luxury good and spirits are inferior goods. 
C)  wine and spirits are highly price elastic. 
D)  wine is a luxury good and spirits are necessities.

Question 4

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a mobile phone provider would be

Accepted Answer

A)  positive if subscribers consider the services substitutes for each other. 
B)  positive if subscribers consider the services complements to each other. 
C)  negative if subscribers consider the services substitutes for each other. 
D)  negative no matter if subscribers consider the services substitutes or complements for each other. 
A)  positive if subscribers consider the services substitutes for each other. 
B)  positive if subscribers consider the services complements to each other. 
C)  negative if subscribers consider the services substitutes for each other. 
D)  negative no matter if subscribers consider the services substitutes or complements for each other.

Question 5

-Refer to Figure 4-7. A unit-elastic supply curve is shown in

Accepted Answer

A)  Panel A. 
B)  Panel B. 
C)  Panel C. 
D)  Panel D. 
A)  Panel A. 
B)  Panel B. 
C)  Panel C. 
D)  Panel D.

Question 6

The demand for heating oil in the short run is more elastic than the long run demand for heating oil.

Accepted Answer

A) True 
 B)False

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

Which of the following correctly comments on the following statement? 'The only way to increase the revenue from selling a product is to increase the product's price.'

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21. This indicates that

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a mobile phone provider would be

-Refer to Figure 4-7. A unit-elastic supply curve is shown in

The demand for heating oil in the short run is more elastic than the long run demand for heating oil.

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 4: Elasticity: The Responsiveness of Demand and Supply

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

Which of the following correctly comments on the following statement? 'The only way to increase the revenue from selling a product is to increase the product's price.'

Studies show that the income elasticity of demand for wine is 5.03 and the income elasticity of demand for spirits is 1.21. This indicates that

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a mobile phone provider would be

-Refer to Figure 4-7. A unit-elastic supply curve is shown in

The demand for heating oil in the short run is more elastic than the long run demand for heating oil.

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters